Update on the Portfolio Management case study

24 Jul 2010 Sandeep Mehta

Here is a quick update on the portfolio management case study: The actual cost of Kin failure, resulting (in my opinion) primarily from a failure to effectively manage a portfolio competing/complimentary of R&D projects to Microsoft is $700M+.  Check out posts on Portfolio Management on some processes, tools and learnings on how to avoid portfolio management errors.

Via Engadget: “Here’s a tidbit in today’s Microsoft quarterly earnings that we previously overlooked: a $240 million cost of revenue ‘primarily… resulting from the discontinuation of the Kin phone, offset in part by decreased Xbox 360 console costs.’ In other words, the company took at least a quarter billion hit due to manufacturing, distribution, and support costs of the Kin (according to Microsoft’s definition of ‘cost of revenue’). We don’t know how much Xbox 360 offset, unfortunately, but we can add this figure to the $500 million Danger acquisition and the full marketing cost for the product (which we also don’t know, but anecdotally, it was on par with other major campaigns) to reach… well, at least $800 million in regret for the folks in Redmond.”

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